The property market in the UK continues to see significant growth, with rising rents and house prices strengthening the case for landlords. Private rents have increased by 8.7% in the year to January, reaching an average of £1,332 across Great Britain. In England, London experienced the highest rent inflation at 11%, while Yorkshire and The Humber saw the lowest at 5.3%. Meanwhile, house prices across the UK have climbed by 4.6% in 2024, with first-time buyers now facing an average property cost of £226,744.
Rental market constrained by supply shortages
The rental market remains under pressure due to a supply-and-demand imbalance, keeping rents elevated. Zoopla data reveals a 22% increase in rental property availability compared to a year ago, yet levels are still below pre-pandemic figures.
Commenting on the rental trends, Richard Donnell, Executive Director at Zoopla, said: “The ONS rental index remains high at 8.7%, reflecting recent rapid growth in rents. While new let rental growth has slowed to 4%, down from 8% last year, the market remains tight. London, in particular, has seen rental growth decline to less than 2% for new lettings.”
Nathan Emerson, CEO of Propertymark, also addressed the ongoing rental price increases, stating: “Selling up altogether or turning to the short-term letting market is becoming a more attractive option for landlords due to the challenging legislative changes and increased financial liabilities they face.”
Despite some indications of slowing rent increases, landlords are still benefiting from strong rental returns as demand continues to outstrip supply in many areas.
Landlords remain key players in stabilising housing supply
As house prices continue to climb, landlords remain essential to the UK housing market. According to the latest data from the Office for National Statistics (ONS), the increase in sales activity over 2024 was driven by a stamp duty rush in the final quarter. Donnell expects house price growth to moderate in 2025 due to a larger selection of homes for sale and higher stamp duty costs from April.
Propertymark’s Emerson echoed this sentiment, stating: “With house prices remaining buoyant, this indicates that the wider economy continues to stabilise, and people are feeling confident in their personal financial positions. As affordability pressures ease, more aspiring homeowners will be able to make their next move.”
Meanwhile, Jean Jameson, Chief Sales Officer at Foxtons, highlighted increasing buyer demand, noting: “January was a strong month for sales, with activity levels rising across key metrics. Buyer demand has continued to grow, with viewing enquiries up 11%.”
Landlords must be supported, not penalised
The government has outlined plans to build more homes across the UK, which, if implemented effectively, could help stabilise house prices and rental supply. However, industry experts caution that the policies should not discourage landlords from investing in the market.
Emerson warned: “A crucial factor to ensure is that good landlords providing secure and decent homes to the nation are supported and not penalised.” He emphasised that a healthy mix of housing tenures is essential, with private landlords playing a critical role in meeting housing demand.
Gareth Atkins, Managing Director of Lettings at Foxtons, noted a positive trend in the London rental market, stating: “Foxtons’ analysis shows a 55% increase in available rental properties compared to the same period in 2023. This growth in supply is contributing to increased competition among available properties, offering stability for both renters and landlords.”
With the UK housing market remaining highly dynamic, landlords continue to be a vital part of the property landscape. The combination of steady house price growth, robust rental demand, and stabilising mortgage rates suggests that property investment remains a solid choice for landlords in 2025 and beyond.
The ONS released private rent and house price data today: Private rent and house prices, UK – Office for National Statistics
